It is quite possible that the sales ban on new combustion engine cars will be postponed. At least this is stated by Lutz Meschke, Chief Financial Officer (CFO) at Porsche.
In an interview with Automotive News, Meschke highlights various obstacles he sees to the phasing out of traditional combustion engines in the EU. He points to falling demand for EVs within the EU. Indeed, at the end of last year it emerged that the market for EVs is shrinking, partly due to uncertainty amongst potential buyers regarding motor vehicle tax (MRB). Because of the battery packs they contain, EVs are generally considerably heavier than their counterparts with traditional internal combustion engines. The weight difference can easily amount to several hundred kilograms.
Fear of high MRB
This could lead to high vehicle registration tax. Anyone who currently owns an EV does not have to pay vehicle registration tax. This will change from 2025; EV drivers will then have to pay a quarter of the standard vehicle registration tax. The tax will rise further in 2026; EV drivers will then pay the full amount.
Bovag also previously expressed concerns about the MRB on EVs. "Buyers are uncertain. As far as we are concerned, this tax measure is not a done deal. There must be a weight correction for the motor vehicle tax, otherwise buyers will drop out and we will not meet the climate targets," Bovag's Paul de Waal previously told AD.
Discussion in many EU countries
Meschke also points to the debate that has arisen in many EU countries regarding the sales ban. Take Germany, for example, which in March 2023 suddenly turned against the EU-wide sales ban on new petrol and diesel cars. The EU and Germany eventually reached an agreement, creating more scope for cars running on sustainable fuels. These include synthetic fuels, which are produced from electricity, biomass or carbon.
Other countries are also critical. In June 2022, for instance, five EU Member States called for a postponement of the ban; these countries want the ban to come into force only in 2040. The countries in question are Bulgaria, Italy, Portugal, Romania and Slovakia. The countries put forward a counter-proposal. Whilst the EU is aiming for a 100 per cent reduction in CO₂ emissions by 2035, the five EU Member States advocated a 90 per cent reduction by that year. By 2040, the sale of new passenger cars with internal combustion engines would then be completely phased out.
Subsidies
Meschke, incidentally, sees an important role for subsidies in encouraging the embrace of EVs. Porsche's CFO would therefore not be surprised if subsidies on EVs return if weak demand persists.
RAI Association also points out the importance of subsidies. As recently as October 2023, the association advocated the continuation of subsidies and tax incentives for electric driving. RAI Association also points to the heavier weight of EVs, arguing that EV drivers should not be penalised for making a sustainable choice.
Author: Wouter Hoeffnagel
Image: Pixabay / Gerd Altmann
